Competition to attract current account holders is heating up, with Britain’s biggest building society launching a £200 switching offer and a linked savings account paying 8% interest.
Nationwide Building Society said the £200 offer is available to people using the Current Account Switch Service (Cass) and transferring a minimum of two active direct debits to the new account.
The offer is available to people switching to one of Nationwide’s three main current accounts – FlexPlus, FlexDirect or the FlexAccount.
It has also introduced a new Flex Regular Saver account, exclusively for current account customers, paying 8% AER (annual equivalent rate) for 12 months.
After a year, the account will revert to an instant access account.
Nationwide has not yet confirmed what interest rate the instant access account will have.
We are offering new and existing current account customers a top-of-market £200 if they switch their main banking relationship to the society— Tom Riley, Nationwide Building Society
If four or more withdrawals are made from the Flex Regular Saver within 12 months of the account being opened, the rate on the account will fall to 2.15% AER.
According to financial information website Moneyfacts, the last time a cash regular savings account was offering a rate of 8% was a decade ago – in 2013. The fixed-term regular saver was being offered with a rate of 8% by first direct.
Members can save up to £200 per calendar month in Nationwide’s new online-managed savings account, which allows up to three withdrawals within the 12 months after the account is opened.
Tom Riley, director of retail products at Nationwide Building Society, said: “We want to give people every reason to join and stay with Nationwide.
“That’s why we are offering new and existing current account customers a top-of-market £200 if they switch their main banking relationship to the society.
“We’re also rewarding our current account customers with a market-leading rate of 8% AER on our Flex Regular Saver.”
The Flex Regular Saver is only available to members who hold one of Nationwide’s current accounts – FlexPlus, FlexDirect, FlexAccount, FlexStudent, FlexGraduate, FlexBasic or FlexOne.
Members can only open one Flex Regular Saver, either as an individual or a joint account.
Regular savings accounts work differently to easy access accounts, so it's important customers read through the account’s criteria to ensure it is right for them— Rachel Springall, Moneyfacts
Rachel Springall, a finance expert at Moneyfacts, said: “Regular savings accounts work differently to easy access accounts, so it’s important customers read through the account’s criteria to ensure it is right for them.”
She added: “It is great to see Nationwide offering a lucrative £200 free cash offer to entice customers, which could be useful for those looking for a cash boost amid a cost-of-living crisis.
“Nationwide offer some competitive current accounts which have various perks which can suit many different needs.
“Choosing the right current account depends on someone’s spending habits as there are a variety of different accounts out there with their own benefits and charges, so it is worth looking at different options to Nationwide.
“Consumers who are searching for a rewarding bank account may wish to choose one that offers cashback on spending or even on their monthly bills – there are even accounts that pay a monthly reward when certain eligibility criteria is met.
“On the other hand, those consumers who may dip into their overdraft would be better off choosing an account with a competitive overdraft tariff or even an account with an interest-free buffer.
“Those consumers who plan to make frequent trips abroad can also find accounts that don’t charge them for using their debit card in an ATM or in store, so they can avoid paying out on transaction fees compared to a more traditional bank account.
It’s the overall package of an account that should be weighed up before someone commits to switching their current account— Rachel Springall, Moneyfacts
“Switching current accounts is easy to do using the Current Account Switch Service and some banks will pay an upfront free cash incentive to entice customers.
“However, it’s the overall package of an account that should be weighed up before someone commits to switching their current account.”
Earlier this week, Lloyds Bank launched a £175 switcher offer for new customers switching from another bank to a Club Lloyds account before November 14.
There is a £3 monthly fee to maintain the account, waived each month when £2,000 or more is paid in.
Club Lloyds customers can benefit from perks including cinema tickets, a magazine subscription, cashback when shopping at selected retailers, and access to preferential rates when ordering travel money.
Account holders can also access the Club Lloyds Monthly Saver, which pays 6.25% AER and allows customers to save between £25 and £400 each month.
With a further Bank of England base rate rise expected on Thursday, the appetite for saving appears to have grown among some banks’ customers.
NatWest reported on Tuesday that the number of fixed-term accounts opened in the first half of 2023 was around 17 times the total it recorded in the same period in 2019.
More than 82,000 fixed-term savings accounts were opened in the first half of this year, the bank said.
This compares with 4,700 in the first half of 2019, according to NatWest’s data.
TSB also launched a new switching offer on Monday, saying new customers who switch to a TSB Spend & Save or Spend & Save Plus current account can potentially receive over £200, subject to customers fulfilling certain terms and conditions.
New customers using Cass can potentially receive £150 from TSB.
Customers can also potentially earn £10 in cashback each month for the first six months with a Spend & Save account, totalling £60.
For Spend & Save Plus, the same cashback is potentially available for the first six months and then it will revert to £5 cashback a month, totalling £90 in the first 12 months.
